Posted by Tess on 11/3/10 10:20pm
Msg #359565

Not good news!

http://www.boston.com/realestate/news/blogs/renow/2010/11/reba_case_mass.html



REBA case: Mass. closing industry at stake
E-mail | Print | Comments (2) Posted by Rona Fischman November 3, 2010 02:05 PM
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"Attorney Richard D. Vetstein. writes today about the court case that looks into whether we need an attorney to do a closing.

Today, the Massachusetts Supreme Judicial Court heard arguments in the closely watched case of The Real Estate Bar Association of Massachusetts, Inc. (REBA) v. National Real Estate Information Services, Inc. (NREIS). This case pits Massachusetts real estate closing attorneys versus out of state non-attorney settlement service providers which are attempting to perform “witness or notary” closings here in Massachusetts. At stake is the billion dollar Massachusetts real estate closing industry.
Unauthorized practice of law?
I wrote previously about the case in this post. Massachusetts’ long standing practice is for licensed attorneys to oversee and conduct the residential real estate closing process. NREIS’s business model is to outsource the vast majority of those functions to back office workers who aren’t trained attorneys. REBA argues that this practice violates Massachusetts common law and consumer protection statutes requiring that attorneys perform the most vital functions of a real estate closing transaction, such as certifying and analyzing title, preparing the deed, handling the transfer of good funds, where necessary, and conducting the closing.

The case was originally brought in federal court, where NREIS won and obtained a $1Million attorney fee award. But the federal appeals court overturned that ruling, and asked the Massachusetts Supreme Judicial Court to answer the question of whether and to what extent a residential real estate transaction and closing is the “practice of law” required to be performed only by a licensed attorney.

Questions from the bench and analysis
• Don’t bet against the SJC ruling against real estate attorneys in this case. After all, the justices are attorneys themselves. Whether they admit it or not, they are naturally inclined to favor their brethren of the bar.

• A favorable decision also upholds the notion that attorneys are vital to the conveyancing system, protect consumers, and cannot simply be outsourced to a non-trained drone. We’ve seen disastrous results when untrained folks try to perform legal tasks with the foreclosure robo-signing scandal. And the SJC may be sensitive to this having just heard the Ibanez foreclosure case.

• Several of the justices weren’t buying NREIS’s argument that its non-attorney back office processors never make legal judgments, but instead simply “flag issues.” Justice Cowen raised several examples of situations requiring an attorney’s trained eye, such as analyzing a title examination, analyzing title defects, and ensuring that loan documents, the deed and mortgage are in the correct form.

• Justice Cowen said that NREIS couldn’t delegate everything to a paralegal. At some point an attorney had to make the final call. And I think that is where the Court will end up on this case–hopefully!

• Justice Gants and Spina both showed their studying of the conveyancing process in asking whether NREIS needed to have attorneys certify title (they do under state statute) and analyze a title rundown (yes, again).

In addition to the parties’ briefs, the SJC has received nearly 20 friend of the court briefs, virtually all of which support REBA’s position that NREIS is engaged in the unauthorized practice of law. The SJC briefs and a webcast are available on these links.The SJC should issue a final ruling in several months.
Should Massachusetts remain a place where attorneys oversee all real estate closings? Did your attorney add to the quality of your closing? "

Reply by Susan Fischer on 11/3/10 11:26pm
Msg #359569

Remember that doc that said very simply,

(paraphrased) 'If you check this box, you waive your right to hire your own attorney, and give [inserted Title Co] permission to remotely close this deal' Or, if you check *this* box, 'you elect to have your attorney present to you each document, explaining with legal authority (not describing , no UPL), and and causing to be Notarized where indicated.

That would be my argument. What has gone ~so~ wrong with remote closings?

To my mind, on the other hand, perhaps this option should be included in the 1003 - right off the bat. Give the Borrower(s) this Option - hiring an attorney -to-handle-the-closing, or, as the above waiver releives that Borrower of the Legal Expenses vs. Remote Closing in their homes, or at their businesses, or at a Resort, or Campground, and all of those Remote Roads taken by We, the Trusty Mobile Notary Remote Closing Professionals, who don't charge Attorney Fees.

Rest my case, Your Honor.

Reply by Susan Fischer on 11/3/10 11:31pm
Msg #359570

oops, floppy fingers - anyway, you get the idea. :) n/m

Reply by ReneeK_MI on 11/4/10 7:05am
Msg #359580

At stake is the billion dollar closing industry - key words!

This is one of the points I'd tried to make earlier - bottom line, these issues are about dollars. Who has the most, who wants the most, who's paying the most...the man behind the curtain isn't really a man, it's a $.

Reply by Scriba/NM on 11/4/10 3:17pm
Msg #359692

Re: At stake is the billion dollar closing industry - key words!

You certainly have that one correct!

Reply by MistarellaFL on 11/4/10 7:58am
Msg #359586

Refer back to Msg #359299

Msg #359299

I won't be surprised if it turns into 50 states requiring attorney closings.

Reply by SuperNotary on 11/4/10 8:25am
Msg #359588

Re: Refer back to Msg #359299

So much negativity regarding the future of Signing Agents. There is a tremendous need for competent SA's in this industry. The last 2 years have been my best yet. I get more and more title companies and attorneys calling me directly and gladly meeting my fees. The only part of this industry that will become extinct is the middle man signing service and incompetent SA's.

Reply by MistarellaFL on 11/4/10 8:40am
Msg #359589

"The last 2 years have been my best yet."

And the for me, personally, they have been the worst yet.
Clients have been going out of business, little to no refis, short sales and most purchases being done in TC's offices....not to mention mtg fraud and suspected mtg fraud keeping the closings local....and it's not just in my little corner of the world.
Consider yourself super-fortunate, supernotary.
Few of us can claim a better bottom line for the last 2 years.

Reply by SuperNotary on 11/4/10 11:00am
Msg #359601

Re: "The last 2 years have been my best yet."

I feel "super-fortunate". Keep a positive attitude and great things happen. It's not always easy but I wake up everyday and say "today is going to be a great day!". "Something good is going to happen to me today".

I don't care how bad things seem or what the media says about the economy, they don't dictate what happens to you personally.

Stay away from the know-it-alls and the nay-sayers!

Reply by LynnNC on 11/4/10 11:01am
Msg #359602

Re: "The last 2 years have been my best yet."

I am sure that the decline in home values in FL has affected your business as many homeowners are upside-down and can't refinance. Home values have been pretty stable in this area of NC...down 5-10% in 3 years...and business is booming.

Reply by James Dawson on 11/4/10 10:06am
Msg #359596

Re: Refer back to Msg #359299

I'm too new to comment about the future of the industry using past experience but one thing i can say is that if Attys here start doing closings the lender will have to add a year to the term of the loan just to pay their (atty) closing fees. LOL

Reply by Roadie_MD on 11/4/10 11:12am
Msg #359613

SuperNotary - I, too, am having my best year since 2007

although there are other factors involved with that here in MD (i.e., MD insurance commission finally enforcing the required license, so fewer people are doing closings). I too am choosing to remain as positive as possible. Only time will tell, but I am also hoping that this recession and the problems within the mortgage industry will weed out those non-paying signing companies as well as the incompetent SA's . When it all started I told myself I was in it for the long haul. I have too much invested in licensing, bonding, equipment, etc. to just give it up. In the past two years the amount of collecting I have to do is down to practically nothing.

The power of positive thinking...

Reply by Tess on 11/4/10 11:18am
Msg #359617

Do not know if this will work, but here is the webcast of the arguments. Very interesting! You can also find the links on the news site that will bring this up.

mms://192.138.214.175/archives/SJC_10744.wmv

Reply by Tess on 11/4/10 11:19am
Msg #359621

Re: Sorry, did not work! Worth a look if you can find it! n/m